Router sales signal carrier activity

Router sales signal carrier activity

Two new reports show that the market for high-end routers has renewed life - perhaps a sign that carriers are finally starting to reinvest in their network infrastructures.

The worldwide high-end router market grew between 6 per cent and 10 per cent in the second quarter, according to separate data compiled by market research firms Gartner and Dell'Oro Group.

Gartner said the second quarter marks the first quarter of growth in this market since declines began a year ago, which followed massive capital expenditure cutting by service providers.

The new numbers might be "an early signal" that the market is poised for a recovery next year, said Gartner analyst Jennifer Liscom. "Both Cisco and Juniper reported that service providers are starting to buy again," she said.

The worldwide service provider router market - which Gartner defines as any carrier-class multi-gigabit system for core or edge duty - totalled $US455.4 million in the second quarter, a 6 per cent increase from the first quarter, according to the firm.

Gartner found Cisco to continue its leadership in the worldwide service provider router market, claiming 54.6 per cent of revenue and 52.9 per cent of shipments, followed most closely by Juniper in both categories.

Nortel Networks boosted its revenue almost 80 per cent in the second quarter with large shipments to China, and displaced Redback Networks as the No. 3 supplier. Redback had an "unusually weak" quarter while undergoing a financial restructuring, Gartner said.

Liscom said she expects growth to continue for the next few quarters as carriers continue their IP network build-outs to meet and stoke demand among businesses for VPN services.

"Things are starting to look like we're progressing to this IP network we've been talking about for so long," she said.

Dell'Oro Group says worldwide sales of 10Gbps systems, used predominantly in the IP core, hit $170 million in the second quarter, an increase of 10 per cent from the first quarter.

But the overall router market was flat, at $1.5 billion, the firm reports.

Router sales have hovered at this level for five consecutive quarters, with minimal quarter-to-quarter fluctuations, Dell'Oro said.

Dell'Oro also found that Cisco retained its market leadership in 10Gbps systems - but its revenue grew only 2 per cent, compared with No. 2 Juniper's 23 per cent gain, and No. 3 Avici Systems' 32 per cent growth.

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.


Show Comments